Thursday, April 15, 2010

Will Blockbuster's new kiosks help save their Business

Blockbuster Express: Their new kiosk model?

By Damien Willow

In 2010, Blockbuster's stock price continues to plummet, from $1.36 on September 15 2009 to $0.36 cents on April 15, 2010. We have seen Blockbuster;s business continue to decline, since Netflix and Redbox entered the video rental industry over the last decade. Blockbuster was once the on top, and they were the ones putting their competitors out of business, and today they are the ones holding on by a thread.

Will Blockbuster be able to develop a new marketing strategy to make them a competitor again? OR are they going to see a similar fate that they showed their competition years ago.

Over the past couple months, Blockbuster has decided to expand their presence in the kiosk game with their new kiosks popping up branded Blockbuster Express. Redbox has proved to create a profitable business model that had been very successful. This had me scratching my head. I think that the kiosk business is not a bad idea, however as more individuals buy computers (since the price has dropped drastically over the past two years) I wonder if this kiosk model will survive. This works great for Redbox now, and since Coinstar owns them it makes sense; they can service both machines at the same time. Blockbuster has partnered (Blockbuster is licensing their name) up with NPR to bring these services to the market and mainly to convenience stores. Is this a good strategy, piggybacking off their competitors and trying to make a better product? OR do they need a game changer? This will be something that will be proved over the next few years.

What is Blockbuster Express?

Blockbuster Express is using the same business model as Redbox, where they allow customers to rent movies for $1.00 a night. The user can either log into their website and rent a movie and find a location to pick it up, or they can just go directly to the kiosk and rent the movie.

After doing further research, I found that the kiosks Blockbuster is now using have been around since 2005, and are owned and operated by NCR. They have been renting movies through these kiosks under the brand "The New Release". So, Blockbuster is just licensing their name and is actually a totally different business than Blockbuster's in-store and mail order video rental business. This just confuses me.

It may be a good business model to have multiple channels (in-store, mail order, and kiosk). However, if I rent or order a movie online or in-store, I can't return it to the kiosk, or if I rent from the kiosk I can't return in-store. This just irritates me and I feel diluted their brand. This is two different companies using the same name just with Express added. Well, will see if it works for them.

My Thoughts....

I just want Blockbuster to go away. For years they have bullied their way to the top and after they were on the top, they just stepped on all of their loyal customers with late fee after late fee. On top of it, they would not work with the customer to fix these fees, instead they just let them build up. They just left a BAD TASTE in my mouth and I will never rent a movie from them again. I joined Netflix years ago and have never had any problems with them. They are awesome!Also, I would rather wait for a movie to be released later then the same day it's is released to DVD (another Blockbuster selling Point). There are plenty of movie to watch while I wait. Additionally, if the earlier release that Blockbuster has on some movies even impacts Netflix, I'm sure they will renegotiate contracts with the studios.

In Conclusion, I think that Blockbuster is a little to late to the game. Netflix has to many loyal customers and I don't see Blockbuster taking them. Also, I remember those late fees...don't you?